ETF: My first investment

Published on: Jul 3, 2019 11:58:08 AM

If you're entering the stock market for the first time, deciding on what to invest in could send you into analysis paralyses. You might have heard about shares, or managed portfolios of shares, but there's another way to invest your money which is increasingly becoming popular for investing newbies: Exchange Traded Funds (ETFs).

What is an Exchange Traded Fund?

An ETF is a collection of stocks or other assets. When you buy an ETF, you’re buying all of the stocks that are in the ETF without having to buy each one separately. Just like stocks, ETFs are traded on an exchange and because of that they can be bought and sold throughout the day. They usually track an index like the S&P 500 or closer to home, the JSE Top40.

Read more on ETFs

What are the benefits of investing in ETFs?

· You can invest in lots of companies with one transaction, instead of having to buy shares in them individually.

· Your risk is diversified because you aren't only investing in one company

· ETFs have many cost saving benefits

· You can invest in global companies, using local currency.

· There's lots of information on each ETF which is available for you to view via their factsheet. This will show you what's inside an ETF, how much each share is weighted, what past performance has been and what the Total Expense Ratio (TER) is.

Just One Lap's Kristia van Heerden shares her experience as a first-time investor who chose to invest in ETFs. Read her story, and get more detail on some of the benefits of ETF investing here:

ETF: My First Investment

The two ETFs mentioned in this article are available to invest in here:

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Any opinions, news, research, reports, analyses, prices, or other information contained within this research is provided by an employee of EasyEquities an authorised FSP (FSP no 22588) as general market commentary and does not constitute investment advice for the purposes of the Financial Advisory and Intermediary Services Act, 2002. First World Trader (Pty) Ltd t/a EasyEquities (“EasyEquities”) does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information (i) contained within this research and (ii) received from third party data providers. You must rely solely upon your own judgment in all aspects of your investment and/or trading decisions and all investments and/or trades are made at your own risk. EasyEquities (including any of their employees) will not accept any liability for any direct or indirect loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on the market commentary. The content contained within is subject to change at any time without notice.

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